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ESE Conference, Zürich
Traian Kaiser | XING AG | April 12, 2010
Traian Kaiser
Director Agile Project Management & PMO (XING AG)

12 years of Internet-Business
Companies: IBM, Yahoo, Qype, XING
MBA, PMP, CSM
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
Date: March 2011
130
                   Employees in Product Development

                   Release per week


Date: March 2011
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
what counts

               Output   Surplus
Productivity             Value
               Input

                What is needed
2008           2009           2010
Revenue (Output)    34 Mio. €      44 Mio. €      54 Mio. €




                                Output         Surplus
     Productivity                               Value
                                Input

                        2008           2009           2010
Cost (Input)        23 Mio. €      33 Mio. €      38 Mio. €
60




45                                                      Productivity Lack



30




15


                   Input   Output        Output same productivity
 0

            2008                    2009                    2010
Overall Figures                  2008               2009               2010
Revenue (Output)             34 Mio. €          44 Mio. €          54 Mio. €
Cost (Input)                 23 Mio. €          33 Mio. €          38 Mio. €
„Surplus Value“                   48%                33%                42%
Revenue with 48% SV          34 Mio. €          49 Mio. €          56 Mio. €
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
Value of developed and distributed software
solutions for business requirements
(including quality and time).


Productivity              Output
In SW Development         Input

Cost of created and distributed software
solutions trough people, services and other
resources needed.
„Do the right things.“
              things.“
    Effectiveness
                         Erfolg




                              Efficiency
                          „Do the things right“
                                         right“
Business Models                      Time to market

               Do the right things
  Domain expertise       Innovations       Market knowledge



              Coordination-
              Coordination- & communication efforts
System cost                                     Service Costs


Staff costs
               Do the things right
  Development efforts        Maintanance efforts
Thesis:
Software development is a creative and
complex process. Effectiveness and efficiency
can not be optimized independently of each
other and the interactions are not detectable in
their entirety.
         Effectiveness




                                  Efficiency
Example 1 – Discovery Process




Balancing effectiveness vs. efficiency by having
a pre-phase finding out if our user like what we
  pre-
                   plan to do
Example 2 - Staffing




  Performance differences between mediocre
   contributors and „artists“ can be huge.
                      artists“       huge.
In addition, working team patterns and team
   addition,
    productivity is another game to play.
                                     play.
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
Reduce coordination and
 communication efforts



Value adding efforts
to “the right things”


    Reduce „Waste“
             Waste“
 (Efforts without value)
                  value)
7 Types of Waste to avoid…
… and how to measure them…

Partially Done Work (Blocked Cards/Tickets/Stories)
Not used Documentation
Extra Features (Feature- / Module usage metrics)
Task Switching (Work In Progress)
Handoffs (Cycle Time)
Delays (Lead Time)
Defects (Failure Load, Code Metrics, Test
         Coverage, Bugs per Line of Code, … )
Communication & coordination
                 efforts to avoid …
… are they measureable?…

Insufficent or excessive process / framework
Unclear or inadequate division of roles
and responsibilities
Too many dependencies of all kind
Performance to Commit / Deadlines
Productive Time
Throughput / Velocity (Variance)
Beware: Efficiency metrics can be
                      dysfunctional…

Assumed efficiency metrics
Working hours
Utilization
Lines of Code

Relative metrics & metric comparison
Velocity

Metrics as replacement for trust
All Metrics
Value adding efforts to increase…

Additonal Sold / used products
Milestone /Project KPIs
Team KPIs
User Impact Indicators

Customer Satisfaction
Net Promoter Score
Number of Customer Complaints / 1000 Customer
User Ratings
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
Customer
Satisfaction
Key Performance
     Indexes by
 dedicated Team
Quality Metrics
Cycle Time &
Lead Time
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
Visualization is a powerfull instrument

                          Inventory   Started   Designed   Coded   Complete

               240
               220
               200
               180
               160
Story Points




               140                          Lead Time
               120
               100
                80
                60                    WIP
                40
                20
                 0




   *Example by David J. Anderson
ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"
Productivity metrics
                                 can be dysfunctional.
    Consider                         Used correctly as
                    Recognize
    software                        feedback channel,
                dependencies
development                      certain metrics could
                      between
as a creative                       provide important
                 effectiveness
and complex                        feedback. Coupling
                and efficiency
     process                         effectiveness and
                                  efficiency metrics is
                                              essential
Thank you
      My Profile: http://www.xing.com/profile/Traian_Kaiser




Join our Group: http://www.xing.com/net/leansoftwaredevelopment/
CREDITS
•   Slide 12: Graph deduced from „Projekteffizienz und Projekteffektivität“ from Dr. Dirk Olufs, Einführung in das
    Projektmanagement, SS 2006, Block 1, Universität Siegen, Juni 2006
•   Slide 15: http://www.flickr.com/photos/dunechaser/1721982928/in/photostream/
DISCLAIMER
This presentation was produced in April 2011 by XING AG (the "Company") solely for use as an information source for
potential business partners and is strictly confidential. It has been made available to you solely for your own information and
may not be copied, distributed or otherwise made available to any other person by any recipient. This presentation is not an
offer for sale of securities in the United States. The distribution of this presentation to you does not constitute an offer or
invitation to subscribe for, or purchase, any shares of the XING AG and neither this presentation nor anything contained
herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever.
The facts and information contained herein are as up-to-date as is reasonably possible and are subject to revision in the
future. Neither the Company nor any of its subsidiaries, any directors, officers, employees, advisors nor any other person
makes any representation or warranty, express or implied as to, and no reliance should be placed on, the accuracy or
completeness of the information contained in this presentation. Neither the Company nor any of its subsidiaries, any
directors, officers, employees, advisors or any other person shall have any liability whatsoever for any loss arising, directly or
indirectly, from any use of this presentation. The same applies to information contained in other material made available at
the presentation.
While all reasonable care has been taken to ensure the facts stated herein are accurate and that the opinions contained
herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and
overview of, the business of the Company. Where any information and statistics are quoted from any external source, such
information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate.
This presentation contains forward-looking statements relating to the business, financial performance and results of the
Company and/or the industry in which the Company operates. These statements are generally identified by words such as
"believes," "expects," "predicts," "intends," "projects," "plans," "estimates," "aims," "foresees," "anticipates," "targets," and
similar expressions. The forward-looking statements, including but not limited to assumptions, opinions and views of the
Company or information from third party sources, contained in this presentation are based on current plans, estimates,
assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results,
performance or events to differ materially from those described in these statements. The Company does not represent or
guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept any
responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any
forward-looking statements.

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ESEconf2011 - Kaiser Traian: "How to measure productivity in software development"

  • 1. ESE Conference, Zürich Traian Kaiser | XING AG | April 12, 2010
  • 2. Traian Kaiser Director Agile Project Management & PMO (XING AG) 12 years of Internet-Business Companies: IBM, Yahoo, Qype, XING MBA, PMP, CSM
  • 5. 130 Employees in Product Development Release per week Date: March 2011
  • 7. what counts Output Surplus Productivity Value Input What is needed
  • 8. 2008 2009 2010 Revenue (Output) 34 Mio. € 44 Mio. € 54 Mio. € Output Surplus Productivity Value Input 2008 2009 2010 Cost (Input) 23 Mio. € 33 Mio. € 38 Mio. €
  • 9. 60 45 Productivity Lack 30 15 Input Output Output same productivity 0 2008 2009 2010 Overall Figures 2008 2009 2010 Revenue (Output) 34 Mio. € 44 Mio. € 54 Mio. € Cost (Input) 23 Mio. € 33 Mio. € 38 Mio. € „Surplus Value“ 48% 33% 42% Revenue with 48% SV 34 Mio. € 49 Mio. € 56 Mio. €
  • 11. Value of developed and distributed software solutions for business requirements (including quality and time). Productivity Output In SW Development Input Cost of created and distributed software solutions trough people, services and other resources needed.
  • 12. „Do the right things.“ things.“ Effectiveness Erfolg Efficiency „Do the things right“ right“
  • 13. Business Models Time to market Do the right things Domain expertise Innovations Market knowledge Coordination- Coordination- & communication efforts System cost Service Costs Staff costs Do the things right Development efforts Maintanance efforts
  • 14. Thesis: Software development is a creative and complex process. Effectiveness and efficiency can not be optimized independently of each other and the interactions are not detectable in their entirety. Effectiveness Efficiency
  • 15. Example 1 – Discovery Process Balancing effectiveness vs. efficiency by having a pre-phase finding out if our user like what we pre- plan to do
  • 16. Example 2 - Staffing Performance differences between mediocre contributors and „artists“ can be huge. artists“ huge. In addition, working team patterns and team addition, productivity is another game to play. play.
  • 19. Reduce coordination and communication efforts Value adding efforts to “the right things” Reduce „Waste“ Waste“ (Efforts without value) value)
  • 20. 7 Types of Waste to avoid… … and how to measure them… Partially Done Work (Blocked Cards/Tickets/Stories) Not used Documentation Extra Features (Feature- / Module usage metrics) Task Switching (Work In Progress) Handoffs (Cycle Time) Delays (Lead Time) Defects (Failure Load, Code Metrics, Test Coverage, Bugs per Line of Code, … )
  • 21. Communication & coordination efforts to avoid … … are they measureable?… Insufficent or excessive process / framework Unclear or inadequate division of roles and responsibilities Too many dependencies of all kind Performance to Commit / Deadlines Productive Time Throughput / Velocity (Variance)
  • 22. Beware: Efficiency metrics can be dysfunctional… Assumed efficiency metrics Working hours Utilization Lines of Code Relative metrics & metric comparison Velocity Metrics as replacement for trust All Metrics
  • 23. Value adding efforts to increase… Additonal Sold / used products Milestone /Project KPIs Team KPIs User Impact Indicators Customer Satisfaction Net Promoter Score Number of Customer Complaints / 1000 Customer User Ratings
  • 26. Key Performance Indexes by dedicated Team
  • 30. Visualization is a powerfull instrument Inventory Started Designed Coded Complete 240 220 200 180 160 Story Points 140 Lead Time 120 100 80 60 WIP 40 20 0 *Example by David J. Anderson
  • 32. Productivity metrics can be dysfunctional. Consider Used correctly as Recognize software feedback channel, dependencies development certain metrics could between as a creative provide important effectiveness and complex feedback. Coupling and efficiency process effectiveness and efficiency metrics is essential
  • 33. Thank you My Profile: http://www.xing.com/profile/Traian_Kaiser Join our Group: http://www.xing.com/net/leansoftwaredevelopment/
  • 34. CREDITS • Slide 12: Graph deduced from „Projekteffizienz und Projekteffektivität“ from Dr. Dirk Olufs, Einführung in das Projektmanagement, SS 2006, Block 1, Universität Siegen, Juni 2006 • Slide 15: http://www.flickr.com/photos/dunechaser/1721982928/in/photostream/
  • 35. DISCLAIMER This presentation was produced in April 2011 by XING AG (the "Company") solely for use as an information source for potential business partners and is strictly confidential. It has been made available to you solely for your own information and may not be copied, distributed or otherwise made available to any other person by any recipient. This presentation is not an offer for sale of securities in the United States. The distribution of this presentation to you does not constitute an offer or invitation to subscribe for, or purchase, any shares of the XING AG and neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. The facts and information contained herein are as up-to-date as is reasonably possible and are subject to revision in the future. Neither the Company nor any of its subsidiaries, any directors, officers, employees, advisors nor any other person makes any representation or warranty, express or implied as to, and no reliance should be placed on, the accuracy or completeness of the information contained in this presentation. Neither the Company nor any of its subsidiaries, any directors, officers, employees, advisors or any other person shall have any liability whatsoever for any loss arising, directly or indirectly, from any use of this presentation. The same applies to information contained in other material made available at the presentation. While all reasonable care has been taken to ensure the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of the Company. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate. This presentation contains forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. These statements are generally identified by words such as "believes," "expects," "predicts," "intends," "projects," "plans," "estimates," "aims," "foresees," "anticipates," "targets," and similar expressions. The forward-looking statements, including but not limited to assumptions, opinions and views of the Company or information from third party sources, contained in this presentation are based on current plans, estimates, assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. The Company does not represent or guarantee that the assumptions underlying such forward-looking statements are free from errors nor do they accept any responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any forward-looking statements.